Financial daily Dagens Naeringsliv on Wednesday reported that Chairwoman Gunn Waersted recently called on Telenor Chief Executive Sigve Brekke to step down, but that a majority of board members had rejected the plan.

Despite owning 54 percent of Telenor's shares, the Norwegian government does not take part in the day-to-day running of the firm or the hiring of managers, but is involved in the appointment and removal of board members.

"The trade and industry minister has full confidence in the chairwoman and the board, as we have in the boards of all the companies where we are owners," a spokesman for the ministry said in a statement on Friday.

"It's unsustainable if the leader of the board and the CEO of a company are unable to cooperate sensibly ... the fact that a potential conflict is brought to light will hopefully help solve the problems, which will in turn be good for shareholders," he added.

Telenor declined to comment on the case. (Reporting by Joachim Dagenborg, writing by Terje Solsvik; Editing by Keith Weir)